04 January 2017

Should Apple get tax breaks in India?

Apple is the world's biggest technology company by revenue. The company has, because of its tax-avoidance approach, often got into regulatory crosshairs. In August 2016, the Cupertino, California-based tech behemoth was ordered by the European Union to pay a fine of euro14 billion for breaking tax laws.

Source: Economic Times
After years of neglect and if I may say, marketing myopia and downright arrogance, Apple has evinced interest in setting up production units in India. It won’t directly own the production units; rather, they will be set up by Wistron, a contract manufacturer of electronic devices. Also, it won't export its made in India phones and other devices!

In India, a single brand retailer has to source 30% of the stuff sold from local business units; this, the Government believes, will give impetus to local industry to invest better technology and thus enhance overall manufacturing ecosystem and higher employment generation.

About six months back, Apple asked for a waiver of this 30% local sourcing clause and the Government of India agreed to it on the condition that such waiver will be for the first three years only. Now it is asking for more in terms of tax breaks and other concessions. I think the government should not concede any more concessions than are available to all such companies in the sector. I am sure giving into Apple’s demands will create a lot of heartburn and set a bad precedence.

Read more here.

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